Information is only protected as a trade secret if it meets the three cumulative criteria of Article L. 151-1 of the French Commercial Code, the third of which is the one businesses most often neglect: having been subject to reasonable protection measures. Without a documented trail of those measures, the claim is lost before it is even brought. Where the three criteria are met, a judge can prohibit further use, order destruction, order products recalled from the market, and award damages calculated on the infringer’s profits. The claim is time-barred after five years.
A sales director resigns and joins a competitor. Three months later, two long-standing clients switch over, and the competitor’s offer follows a pricing structure the business thought was confidential. The director wants to act quickly. The lawyer’s first question is not about the employee’s departure, but about what was done, beforehand, to protect that pricing grid: who had access to it, under what controls, with what confidentiality marking, and what record remains of it. The answer determines whether the secret even exists in law.
The three cumulative criteria of Article L. 151-1
Introduced by the law of 30 July 2018 transposing Directive (EU) 2016/943, Article L. 151-1 of the Commercial Code protects any information that is not, in itself or in the precise configuration and assembly of its elements, generally known or readily accessible to persons familiar with that type of information because of their sector of activity, that has actual or potential commercial value because of its secret nature, and that has been subject, by its lawful holder, to reasonable protection measures given the circumstances.
The first two criteria are rarely decisive: a pricing grid, a client list with their terms, a manufacturing process, a pricing algorithm or a development plan almost always meet the conditions of relative secrecy and commercial value. It is the third criterion that decides the case. It does not require a military-grade security system, but reasonable and above all demonstrable measures: signed confidentiality clauses, document marking, restricted IT access rights, an accepted IT charter, procedures for the return of equipment when employees leave, confidentiality agreements with partners, access logging. A business that has none of this may have been raided without being able to invoke trade secret protection.
Obtaining, using, disclosing: three distinct infringements
Article L. 151-4 treats as unlawful obtaining a secret without the lawful holder’s consent, where it results from unauthorised access to a document, object, material, substance or digital file containing the secret or from which it can be deduced, from unauthorised appropriation or copying of these elements, or from any other conduct considered dishonest and contrary to commercial practice.
Article L. 151-5 then covers unlawful use and disclosure, by anyone who obtained the secret under these conditions or who acts in breach of an obligation not to disclose it or to limit its use. Its second paragraph extends this to producing, offering, placing on the market, importing, exporting and storing any product resulting to a significant extent from an infringement of the secret, where the person knew or should have known that the secret was being used unlawfully. This extension is critical: it allows action against a distributor or subcontractor who did not steal the information themselves but sells the resulting product.
What trade secret protection cannot block
Trade secret protection is not a universal confidentiality key. Article L. 151-7 makes it unenforceable where obtaining, using or disclosing the information is required or authorised by EU law, treaties, or national law, in particular in the exercise of the investigative, supervisory, authorisation or sanctioning powers of judicial or administrative authorities. A business cannot invoke trade secret protection against a Competition Authority investigation or a dawn raid.
Article L. 151-8 adds three exceptions in proceedings concerning an infringement: the exercise of the right to freedom of expression and communication, including freedom of the press and freedom of information; disclosure, in good faith and for the purpose of protecting the general interest, of illegal activity, wrongdoing or misconduct, including in the exercise of whistleblowing rights; and protection of a legitimate interest recognised by EU or national law. A claim brought against a journalist or a whistleblower runs into these exceptions and is exposed to the risk discussed further below.
The measures a judge can order
Article L. 152-3 allows the court, without prejudice to damages, to order any proportionate measure, including under a daily penalty, to prevent or stop the infringement: prohibiting the use or disclosure of the secret, prohibiting the production, offering, placing on the market or use of products resulting to a significant extent from the infringement, as well as their import, export or storage, ordering the total or partial destruction of any document, object, material, substance or digital file containing the secret or from which it can be deduced, or its handover to the claimant. The court can also order products recalled from commercial channels, permanently withdrawn, altered, destroyed, or confiscated for the benefit of the injured party.
Ahead of proceedings on the merits, Article L. 152-4 opens the way to provisional and protective measures, on application or in urgent proceedings. Article R. 152-1 sets out their content: prohibiting acts of use or disclosure, prohibiting the production and marketing of products suspected of resulting from a significant infringement, seizing or handing these products to a third party to prevent them entering or circulating on the market. This is where real effectiveness is decided, since a prohibition obtained eighteen months after the facts does not recover a lost market.
Calculating damages: three separate heads
Article L. 152-6 requires the court to take into account separately the negative economic consequences of the infringement, including lost profits and the loss suffered, including loss of a chance; the moral prejudice; and the profits made by the infringer, including savings on intellectual, material and promotional investment that resulted from it. This third head is the one claimants most often forget to quantify, even though it is frequently the largest: a competitor that appropriates a process has paid for none of the research, the trials, or the failures.
The same article opens an alternative, at the injured party’s request: a lump sum taking into account in particular the royalties that would have been due had the infringer sought authorisation to use the secret, this sum not excluding compensation for moral prejudice. The option is useful where lost profits are hard to establish, but it caps compensation in practice. The choice between the two methods is made after both have been calculated, not before.
Arguing the case without revealing the secret: Article L. 153-1
The paradox of this type of litigation is that the secret must be produced in order to defend it. Article L. 153-1 addresses this by allowing the court, of its own motion or at the request of a party or a third party, where protection of the secret cannot be ensured otherwise and without prejudice to the rights of the defence, to review the document alone and order an expert assessment where appropriate, to limit disclosure to certain elements or order it in summary form, to restrict access for each party to at most one individual and one person authorised to assist or represent them, to decide that hearings will be held in chambers, and to adapt the reasoning of its decision and how it is published.
This mechanism, known in practice as a confidentiality circle, must be requested from the writ of summons or the application itself, not during the proceedings. It works alongside Article 145 of the Code of Civil Procedure, which allows an investigative measure to be obtained before any trial where there is a legitimate reason to preserve or establish evidence of facts on which the outcome of the dispute may depend. An application for a bailiff’s report at the competitor’s premises, combined with sequestration of the items seized and a request for protection under Article L. 153-1, is the most effective approach, but also the most technical: a poorly drafted application gets set aside, and the element of surprise does not come back.
The risk of a poorly brought claim
Article L. 152-8 sanctions anyone who brings a claim on this basis in a dilatory or abusive manner with a civil fine of up to twenty percent of the damages claimed, or sixty thousand euros where no damages are claimed, without prejudice to damages owed to the party who was the victim of the proceedings. The text specifically targets claims intended to silence a journalist, an employee or a whistleblower.
Lastly, Article L. 152-2 sets a five-year time limit running from the day the lawful holder knew or should have known of the last fact giving rise to the claim. The wording refers to the last fact, which is favourable in the case of a continuing infringement, but the sliding starting point of what the holder should have known makes it necessary to react from the first warning signs, and to date every finding.
What the firm does, and in what order
On the prevention side, the work consists of making the third criterion of Article L. 151-1 demonstrable: mapping the information to protect, confidentiality clauses adapted to employment contracts, service contracts and negotiations, an access-rights and marking policy, and a procedure for departing staff. It is modest in volume, and it is what makes a later claim possible at all.
On the response side, the order of operations matters more than the vigour of the complaint: securing and recording the evidence, an application under Article 145 of the Code of Civil Procedure with sequestration, a request for protection under Article L. 153-1, provisional measures under Article L. 152-4, then a claim on the merits with damages calculated across the three heads of Article L. 152-6. The firm also acts in defence, in particular where a business is the target of an application or a seizure and the period to challenge it is running.
An information leak, an employee’s departure followed by misappropriation, a seizure carried out against you on the basis of trade secrets? The firm secures the evidence and chooses the procedural route before the time limit works against you. Get your case assessed.
Frequently asked questions
Is a client list covered by trade secret protection?
It can be, provided it meets the three criteria of Article L. 151-1 of the Commercial Code: not being readily accessible to professionals in the sector, having commercial value because of its secret nature, and being subject to reasonable protection measures. A list extracted from a public directory or accessible to all employees without restriction does not meet these conditions.
What needs to have been done beforehand to be able to act?
Reasonable and demonstrable protection measures: confidentiality clauses, document marking, restricted IT access rights, an IT charter, a procedure for returning equipment when employees leave, confidentiality agreements with partners. This is the third criterion of Article L. 151-1, and the one on which claims most often fail.
What is the time limit to act?
Five years, under Article L. 152-2 of the Commercial Code, running from the day the lawful holder of the secret knew or should have known of the last fact giving rise to the claim. The starting point therefore takes into account what the business should have known, which makes it necessary to date every finding from the first warning signs.
How can a secret be produced in court without disclosing it to the other side?
Through the mechanism in Article L. 153-1 of the Commercial Code: the judge can review the document alone, limit disclosure to certain elements or to a summary, restrict access to one individual and one adviser per party, hold hearings in chambers, and adapt the reasoning of the decision. This request must be made from the writ of summons or the application.
Can action be taken against someone who sells a product derived from the secret without having stolen it?
Yes. The second paragraph of Article L. 151-5 of the Commercial Code treats as unlawful use the production, offering, placing on the market, importing, exporting or storing of any product resulting to a significant extent from an infringement of the secret, where the person knew or should have known that the secret was being used unlawfully.
To go further: practical guide on trade secrets and the right to evidence, shareholder disputes, sudden termination of a commercial relationship, business law.
Written by Hervé Guyader, member of the Paris Bar, doctor of law. This content is general information and does not replace legal consultation.